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Keyword Ads: Google Unable to Short-Circuit Trademark Infringement Lawsuit

By Steve Baird® on April 6, 2009
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Remember what you were doing back in September 2006?

Keyword ad trademark infringement lawsuits were being filed left and right (that hasn’t changed much). The hot issue at the time: Does the sale (by a search engine) or purchase (by the competitor of a brand owner) of another’s trademark — as a search engine keyword — constitute “use in commerce,” a necessary element of a successful trademark infringement lawsuit?

Search engines and other defendants were hoping that the technical “no use” defense would permit a short-circuiting of these growing number of lawsuits. In fact, this hope was fueled on September 28, 2006 when Google had just prevailed in dismissing such a lawsuit brought by Rescuecom.

A federal district court in New York had dismissed the Rescuecom suit, saying that the sale of Rescuecom’s trademark as part of Google’s AdWords program did not constitute a “use in commerce,” so there was no need to even consider the question of likely consumer confusion. For the next few years, other courts followed suit (mostly in NY) and similarly short-circuited and dismissed such claims.

As of last Friday, two and a half years after Google’s initial win, and a full year after oral arguments were made to the Second Circuit Court of Appeals, Rescuecom may be singing, “We’re back!”

In reversing the September 2006 dismissal, the Second Circuit Court of Appeals found sufficient trademark “use” for the case to proceed, relying on Rescuecom’s allegation that “Google displays, offers, and sells Rescuecom’s mark to Google’s advertising customers when selling its advertising services. In addition, Google encourages the purchase of Rescuecom’s mark through its Keyword Suggestion Tool.” As such, the Rescuecom case will proceed and is sent back to the federal district court in New York to determine “whether Google’s actual practice is in fact benign or confusing.”

The Trademark Blog provides a helpful link through Scribd to obtain a copy of the court’s 15-page decision (including the 19-page Appendix) here.

Professor Eric Goldman’s detailed analysis can be found at his Technology & Marketing Blog by clicking here.

You might remember my keyword advertising post on DuetsBlog from a couple of weeks ago here.

Bottom line: It appears that this latest ruling will pave the way for decisions that actually rule on the critical likelihood of confusion question.

Photo of Steve Baird® Steve Baird®

View my professional biography

Just so you know, I’m all about brands and the law, both professionally and personally. I regularly annoy family and friends in retail stores by focusing on product labels—not to buy the product, but to read the fine print…

View my professional biography

Just so you know, I’m all about brands and the law, both professionally and personally. I regularly annoy family and friends in retail stores by focusing on product labels—not to buy the product, but to read the fine print and ask, “Who owns these brands” and “Did they really register those marks?” To understand the depth of my passion for brands and helping clients achieve their business goals, legally, you must understand that my interest in business and branding goes back to the late 1960s. The very first brand I recall profiting from was Jiffy®. Even before being old enough to deliver papers for the Iowa City Press Citizen, between episodes of Bewitched®, I would bake cupcakes and walk my finished product door-to-door, sampling along the way, of course, throughout our Kimball Road neighborhood, mostly selling them to husbands whose wives didn’t bake enough (probably watching Bewitched®), according to them at least. One hundred percent profit margins are easy when you can use the necessary equipment and raw materials directly from Mom’s kitchen. Mass producing “hot pads” (pot holders, not real estate) and selling them door-to-door was another favorite childhood business venture at the ripe age of six. Graduating to lawn-mowing age worked well with my paper routes because I could easily see who needed help cutting their grass and, in some cases, avoiding neighborhood ridicule. Yes, you’re right, Dad loaned me his Lawn-Boy® mower on weekends, rent-free, and even bought the gasoline (Dad was not brand loyal at all with gasoline, so I have no brand memory there). Another pure profit opportunity. Let’s just say that Mom and Dad were generous, unsecured investors in my development and future. Thanks Mom and Dad, I now understand the meaning of overhead and capital improvements! I bucked a lot of family tradition and jokes to become a lawyer and a trademark guru. There is not one lawyer in the family tree, as far as my sister knows (and she would know). Nearly everyone is, or was, a teacher of some kind. That must be where my passion for educating others about the legal implications of branding comes from. Basically, I have been speaking about the legal implications of branding since the early 90s, after permitting my pharmacist’s license to expire (after being a victim of an armed robbery where Dilaudid® was on the top of the gunman’s list of desired controlled substances), and shortly after working for an 86 year old federal judge whose chambers had a nice view of the White House in Washington, D.C. While I’d like to say that the movie My Cousin Vinny inspired me to become a lawyer, it was released two years after I graduated from law school. So, really, I guess it just inspired me to be a better lawyer and leader. For now, you can call me a “thought-leader” in the trademark world, and the thankful leader of a very talented group of creative and insightful lawyers and staff who are dedicated to putting our intellectual property clients in the best possible position to achieve their business goals. When I’m not in the office, “cracking the whip,” making sure others in the group keep their bios on this blog short and sweet, working (which isn’t to say I’m not still thinking about my clients’ businesses), or soaking it up in the hot-tub with my soul-mate, I am a dedicated family man – a.k.a. the chauffeur. Until they reach the driving age, I’ll continue to shuttle my four wonderful kids around to their athletic and other events, at which you can find me cheering in the stands.

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  • Posted in:
    Antitrust, Competition and Trade
  • Blog:
    DuetsBlog
  • Organization:
    Winthrop & Weinstine, P.A.
  • Article: View Original Source

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